0000808362 us-gaap:CommonStockMember 2011-01-01 2011-09-30 0000808362 us-gaap:CommonStockMember 2010-01-01 2010-09-30 0000808362 us-gaap:RetainedEarningsMember 2011-09-30 0000808362 us-gaap:NoncontrollingInterestMember 2011-09-30 0000808362 us-gaap:CommonStockMember 2011-09-30 0000808362 us-gaap:AdditionalPaidInCapitalMember 2011-09-30 0000808362 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2011-09-30 0000808362 us-gaap:RetainedEarningsMember 2010-12-31 0000808362 us-gaap:NoncontrollingInterestMember 2010-12-31 0000808362 us-gaap:CommonStockMember 2010-12-31 0000808362 us-gaap:AdditionalPaidInCapitalMember 2010-12-31 0000808362 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2010-12-31 0000808362 us-gaap:RetainedEarningsMember 2010-09-30 0000808362 us-gaap:NoncontrollingInterestMember 2010-09-30 0000808362 us-gaap:CommonStockMember 2010-09-30 0000808362 us-gaap:AdditionalPaidInCapitalMember 2010-09-30 0000808362 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2010-09-30 0000808362 us-gaap:RetainedEarningsMember 2009-12-31 0000808362 us-gaap:NoncontrollingInterestMember 2009-12-31 0000808362 us-gaap:CommonStockMember 2009-12-31 0000808362 us-gaap:AdditionalPaidInCapitalMember 2009-12-31 0000808362 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2009-12-31 0000808362 bhi:SeniorNotesThreeMember 2011-01-01 2011-09-30 0000808362 bhi:SeniorNotesThreeMember 2011-01-01 2011-09-30 0000808362 bhi:SeniorNotesOneMember 2011-01-01 2011-06-30 0000808362 bhi:SeniorNotesOneMember 2011-01-01 2011-06-30 0000808362 2011-08-01 2011-08-31 0000808362 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2011-01-01 2011-09-30 0000808362 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2010-01-01 2010-09-30 0000808362 bhi:RevolvingCreditFacilityThreeMember 2011-09-30 0000808362 us-gaap:TradeNamesMember 2011-09-30 0000808362 bhi:InProcessResearchAndDevelopmentMember 2011-09-30 0000808362 us-gaap:TradeNamesMember 2010-12-31 0000808362 bhi:InProcessResearchAndDevelopmentMember 2010-12-31 0000808362 us-gaap:SegmentGeographicalGroupsOfCountriesGroupTwoMember 2011-07-01 2011-09-30 0000808362 us-gaap:SegmentGeographicalGroupsOfCountriesGroupOneMember 2011-07-01 2011-09-30 0000808362 us-gaap:OperatingSegmentsMember 2011-07-01 2011-09-30 0000808362 bhi:NorthAmericaMember 2011-07-01 2011-09-30 0000808362 bhi:LatinAmericaMember 2011-07-01 2011-09-30 0000808362 bhi:IndustrialServicesAndOtherMember 2011-07-01 2011-09-30 0000808362 us-gaap:OperatingSegmentsMember 2011-01-01 2011-09-30 0000808362 bhi:IndustrialServicesAndOtherMember 2011-01-01 2011-09-30 0000808362 us-gaap:SegmentGeographicalGroupsOfCountriesGroupTwoMember 2010-07-01 2010-09-30 0000808362 us-gaap:SegmentGeographicalGroupsOfCountriesGroupOneMember 2010-07-01 2010-09-30 0000808362 us-gaap:OperatingSegmentsMember 2010-07-01 2010-09-30 0000808362 bhi:NorthAmericaMember 2010-07-01 2010-09-30 0000808362 bhi:LatinAmericaMember 2010-07-01 2010-09-30 0000808362 bhi:IndustrialServicesAndOtherMember 2010-07-01 2010-09-30 0000808362 us-gaap:SegmentGeographicalGroupsOfCountriesGroupTwoMember 2010-01-01 2010-09-30 0000808362 us-gaap:SegmentGeographicalGroupsOfCountriesGroupOneMember 2010-01-01 2010-09-30 0000808362 us-gaap:OperatingSegmentsMember 2010-01-01 2010-09-30 0000808362 bhi:NorthAmericaMember 2010-01-01 2010-09-30 0000808362 bhi:LatinAmericaMember 2010-01-01 2010-09-30 0000808362 bhi:IndustrialServicesAndOtherMember 2010-01-01 2010-09-30 0000808362 us-gaap:SegmentGeographicalGroupsOfCountriesGroupTwoMember 2011-01-01 2011-09-30 0000808362 us-gaap:SegmentGeographicalGroupsOfCountriesGroupOneMember 2011-01-01 2011-09-30 0000808362 bhi:LatinAmericaMember 2011-01-01 2011-09-30 0000808362 bhi:GroupFiveMember 2011-01-01 2011-09-30 0000808362 bhi:NorthAmericaMember 2011-01-01 2011-09-30 0000808362 us-gaap:SegmentGeographicalGroupsOfCountriesGroupTwoMember 2011-09-30 0000808362 us-gaap:SegmentGeographicalGroupsOfCountriesGroupOneMember 2011-09-30 0000808362 bhi:NorthAmericaMember 2011-09-30 0000808362 bhi:LatinAmericaMember 2011-09-30 0000808362 bhi:GroupFiveMember 2011-09-30 0000808362 us-gaap:SegmentGeographicalGroupsOfCountriesGroupTwoMember 2010-12-31 0000808362 us-gaap:SegmentGeographicalGroupsOfCountriesGroupOneMember 2010-12-31 0000808362 bhi:NorthAmericaMember 2010-12-31 0000808362 bhi:LatinAmericaMember 2010-12-31 0000808362 bhi:GroupFiveMember 2010-12-31 0000808362 2011-01-01 2011-12-31 0000808362 us-gaap:TradeNamesMember 2011-09-30 0000808362 us-gaap:CustomerRelationshipsMember 2011-09-30 0000808362 bhi:TechnologyMember 2011-09-30 0000808362 bhi:ContractBasedMember 2011-09-30 0000808362 us-gaap:TradeNamesMember 2010-12-31 0000808362 us-gaap:CustomerRelationshipsMember 2010-12-31 0000808362 bhi:TechnologyMember 2010-12-31 0000808362 bhi:ContractBasedMember 2010-12-31 0000808362 us-gaap:InterestRateSwapMember us-gaap:InterestExpenseMember 2011-07-01 2011-09-30 0000808362 bhi:MarketingGeneralAndAdministrativeMember us-gaap:ForeignExchangeContractMember 2011-07-01 2011-09-30 0000808362 us-gaap:InterestRateSwapMember us-gaap:InterestExpenseMember 2011-01-01 2011-09-30 0000808362 bhi:MarketingGeneralAndAdministrativeMember us-gaap:ForeignExchangeContractMember 2011-01-01 2011-09-30 0000808362 us-gaap:InterestRateSwapMember us-gaap:InterestExpenseMember 2010-07-01 2010-09-30 0000808362 bhi:MarketingGeneralAndAdministrativeMember us-gaap:ForeignExchangeContractMember 2010-07-01 2010-09-30 0000808362 us-gaap:InterestRateSwapMember us-gaap:InterestExpenseMember 2010-01-01 2010-09-30 0000808362 bhi:MarketingGeneralAndAdministrativeMember us-gaap:ForeignExchangeContractMember 2010-01-01 2010-09-30 0000808362 us-gaap:OtherAssetsMember us-gaap:InterestRateSwapMember 2011-09-30 0000808362 bhi:OtherCurrentAssetsMember us-gaap:ForeignExchangeContractMember 2011-09-30 0000808362 bhi:OtherAccruedLiabilitiesMember us-gaap:ForeignExchangeContractMember 2011-09-30 0000808362 us-gaap:OtherAssetsMember us-gaap:InterestRateSwapMember 2010-12-31 0000808362 bhi:OtherCurrentAssetsMember us-gaap:ForeignExchangeContractMember 2010-12-31 0000808362 bhi:OtherAccruedLiabilitiesMember us-gaap:ForeignExchangeContractMember 2010-12-31 0000808362 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2011-07-01 2011-09-30 0000808362 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2010-07-01 2010-09-30 0000808362 us-gaap:FairValueInputsLevel3Member us-gaap:HedgeFundsMember 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:UsPropertyFundMember 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:NonUsPropertyFundMember 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:NonUsInsuranceContractsMember 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:GlobalPropertyFundMember 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member us-gaap:HedgeFundsMember 2011-06-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:UsPropertyFundMember 2011-06-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:NonUsPropertyFundMember 2011-06-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:NonUsInsuranceContractsMember 2011-06-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:GlobalPropertyFundMember 2011-06-30 0000808362 us-gaap:FairValueInputsLevel3Member 2011-06-30 0000808362 us-gaap:HedgeFundsMember us-gaap:FairValueInputsLevel3Member 2010-12-31 0000808362 us-gaap:FairValueInputsLevel3Member bhi:UsPropertyFundMember 2010-12-31 0000808362 us-gaap:FairValueInputsLevel3Member bhi:NonUsPropertyFundMember 2010-12-31 0000808362 us-gaap:FairValueInputsLevel3Member bhi:NonUsInsuranceContractsMember 2010-12-31 0000808362 bhi:GlobalPropertyFundMember us-gaap:FairValueInputsLevel3Member 2010-12-31 0000808362 us-gaap:FairValueInputsLevel3Member 2010-12-31 0000808362 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2011-01-01 2011-09-30 0000808362 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2010-01-01 2010-09-30 0000808362 us-gaap:UnitedStatesPensionPlansOfUSEntityDefinedBenefitMember 2011-07-01 2011-09-30 0000808362 us-gaap:ForeignPensionPlansDefinedBenefitMember 2011-07-01 2011-09-30 0000808362 us-gaap:UnitedStatesPensionPlansOfUSEntityDefinedBenefitMember 2011-01-01 2011-09-30 0000808362 us-gaap:ForeignPensionPlansDefinedBenefitMember 2011-01-01 2011-09-30 0000808362 us-gaap:UnitedStatesPensionPlansOfUSEntityDefinedBenefitMember 2010-07-01 2010-09-30 0000808362 us-gaap:ForeignPensionPlansDefinedBenefitMember 2010-07-01 2010-09-30 0000808362 us-gaap:UnitedStatesPensionPlansOfUSEntityDefinedBenefitMember 2010-01-01 2010-09-30 0000808362 us-gaap:ForeignPensionPlansDefinedBenefitMember 2010-01-01 2010-09-30 0000808362 us-gaap:FairValueInputsLevel3Member us-gaap:HedgeFundsMember 2011-07-01 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:UsPropertyFundMember 2011-07-01 2011-09-30 0000808362 bhi:NonUsPropertyFundMember us-gaap:FairValueInputsLevel3Member 2011-07-01 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:NonUsInsuranceContractsMember 2011-07-01 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:GlobalPropertyFundMember 2011-07-01 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member 2011-07-01 2011-09-30 0000808362 us-gaap:HedgeFundsMember us-gaap:FairValueInputsLevel3Member 2011-01-01 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:UsPropertyFundMember 2011-01-01 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:NonUsPropertyFundMember 2011-01-01 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member bhi:NonUsInsuranceContractsMember 2011-01-01 2011-09-30 0000808362 bhi:GlobalPropertyFundMember us-gaap:FairValueInputsLevel3Member 2011-01-01 2011-09-30 0000808362 us-gaap:FairValueInputsLevel3Member 2011-01-01 2011-09-30 0000808362 bhi:SeniorNotesTwoMember 2011-09-30 0000808362 bhi:SeniorNotesThreeMember 2011-09-30 0000808362 bhi:SeniorNotesThreeMember 2011-09-30 0000808362 bhi:SeniorNotesOneMember 2011-09-30 0000808362 bhi:SeniorNotesOneMember 2011-06-30 0000808362 2011-08-31 0000808362 us-gaap:RetainedEarningsMember 2011-01-01 2011-09-30 0000808362 us-gaap:RetainedEarningsMember 2010-01-01 2010-09-30 0000808362 2010-09-30 0000808362 2009-12-31 0000808362 2010-04-01 2010-04-30 0000808362 us-gaap:AdditionalPaidInCapitalMember 2010-01-01 2010-09-30 0000808362 us-gaap:NoncontrollingInterestMember 2011-01-01 2011-09-30 0000808362 us-gaap:AdditionalPaidInCapitalMember 2011-01-01 2011-09-30 0000808362 2011-10-27 0000808362 2009-06-01 2009-06-30 0000808362 2010-01-01 2010-12-31 0000808362 bhi:LineOfCreditDueTwoThousandTwelveMember 2011-09-30 0000808362 bhi:LineOfCreditDueTwoThousandThirteenMember 2011-09-30 0000808362 2010-04-28 0000808362 2011-09-30 0000808362 2010-12-31 0000808362 2011-01-01 2011-03-31 0000808362 2011-09-01 2011-09-30 0000808362 2011-07-01 2011-09-30 0000808362 2010-07-01 2010-09-30 0000808362 2010-01-01 2010-09-30 0000808362 2011-03-31 0000808362 2011-01-01 2011-09-30 bhi:Year iso4217:USD xbrli:shares xbrli:pure bhi:Segment bhi:Swap xbrli:shares iso4217:USD

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left"> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 1. GENERAL</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>Nature of Operations</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Baker Hughes Incorporated (“Baker Hughes,” “Company,” “we,” “our” or “us”) is engaged in the oilfield services industry. We are a leading supplier of wellbore-related products and technology services and provide products and services for drilling, pressure pumping, formation evaluation, completion and production, and reservoir development services to the worldwide oil and natural gas industry. We also provide products and services to the downstream refining and process and pipeline industries. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Basis of Presentation</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Our unaudited consolidated condensed financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. These unaudited consolidated condensed financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K/A for the year ended December 31, 2010 (“2010 Annual Report”). We believe the unaudited consolidated condensed financial statements included herein reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. In the notes to the unaudited consolidated condensed financial statements, all dollar and share amounts in tabulations are in millions of dollars and shares, respectively, unless otherwise indicated. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Accounting Standards Updates</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In May 2011, the Financial Accounting Standards Board (“FASB”) issued an update to Accounting Standards Codification (“ASC”) 820, <i>Fair Value Measurement</i>. The Accounting Standards Update (“ASU”) conforms certain sections of ASC 820 to International Financial Reporting Standards in order to provide a single converged guidance on the measurement of fair value. This update also expands the existing disclosure requirements for fair value measurements. This ASU is effective for interim and annual periods beginning after December 15, 2011. We will adopt this ASU prospectively in the first quarter of 2012. We currently do not expect this ASU to have a material impact, if any, on our consolidated condensed financial statements. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In June 2011, the FASB issued an update to ASC 220, <i>Comprehensive Income</i>. This ASU requires entities to present components of comprehensive income in either a continuous statement of comprehensive income or two separate but consecutive statements that would include reclassification adjustments for items that are reclassified from other comprehensive income to net income on the face of the financial statements. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We will adopt the new presentation requirements of this ASU retrospectively in the first quarter of 2012. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In September 2011, the FASB issued an update to ASC 350, <i>Intangibles — Goodwill and Other.</i> This ASU amends the guidance in ASC 350-20 on testing for goodwill impairment. The revised guidance allows entities testing for goodwill impairment to have the option of performing a qualitative assessment before calculating the fair value of the reporting unit. The ASU does not change how goodwill is calculated or assigned to reporting units, nor does it revise the requirement to test annually for impairment. The ASU is limited to goodwill and does not amend the annual requirement for testing other indefinite-lived intangible assets for impairment. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We will adopt this ASU for our 2012 goodwill impairment testing. We do not expect this ASU to have a material impact, if any, on our consolidated condensed financial statements. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 2. ACQUISITIONS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>ACQUISITION OF BJ SERVICES</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On April 28, 2010, we acquired 100% of the outstanding common stock of BJ Services Company (“BJ Services”) in a cash and stock transaction valued at $6,897 million. BJ Services is a leading provider of pressure pumping and other oilfield services and was acquired to expand the product offerings of the Company. Total consideration consisted of $793 million in cash, 118 million shares valued at $6,048 million, and Baker Hughes options with a fair value of $56 million in exchange for BJ Services options. We also assumed all outstanding stock options held by BJ Services employees and directors. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Recording of Assets Acquired and Liabilities Assumed</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The transaction has been accounted for using the acquisition method of accounting, and accordingly assets acquired and liabilities assumed were recorded at their fair values as of the acquisition date. The excess of the consideration transferred over those fair values totaling $4,406 million was recorded as goodwill. The following table summarizes the amounts recognized for assets acquired and liabilities assumed. </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Fair Values</b></td> <td> </td> </tr>   <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Assets: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Cash and cash equivalents </div></td> <td> </td> <td align="left">$</td> <td align="right">113</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Accounts receivable </div></td> <td> </td> <td> </td> <td align="right">951</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Inventories </div></td> <td> </td> <td> </td> <td align="right">419</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other current assets </div></td> <td> </td> <td> </td> <td align="right">125</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Property, plant and equipment </div></td> <td> </td> <td> </td> <td align="right">2,745</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Intangible assets </div></td> <td> </td> <td> </td> <td align="right">1,404</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Goodwill </div></td> <td> </td> <td> </td> <td align="right">4,406</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other long-term assets </div></td> <td> </td> <td> </td> <td align="right">109</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Liabilities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Liabilities for change in control and transaction fees </div></td> <td> </td> <td> </td> <td align="right">210</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Current liabilities </div></td> <td> </td> <td> </td> <td align="right">776</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Deferred income taxes and other tax liabilities </div></td> <td> </td> <td> </td> <td align="right">1,428</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Long-term debt </div></td> <td> </td> <td> </td> <td align="right">531</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Pension and other postretirement liabilities </div></td> <td> </td> <td> </td> <td align="right">154</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other long-term liabilities </div></td> <td> </td> <td> </td> <td align="right">29</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Noncontrolling interests </div></td> <td> </td> <td> </td> <td align="right">247</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net assets acquired </div></td> <td> </td> <td align="left">$</td> <td align="right">6,897</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     During the quarter ended March 31, 2011, we increased our step-up adjustment related to noncontrolling interests in certain BJ Services entities by $68 million to $202 million and reduced our step-up adjustment related to deferred tax liabilities and other taxes by $21 million to $1,262 million as part of the acquisition accounting related to fair market value adjustments for acquired intangible assets and property, plant and equipment (“PP&E”) as well as for uncertain tax positions taken in prior years. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Pro Forma Impact of the Acquisition</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following unaudited supplemental pro forma results present consolidated information as if the acquisition had been completed as of January 1, 2010. The pro forma results include: (i) the amortization associated with an estimate of the acquired intangible assets, (ii) interest expense associated with debt used to fund a portion of the acquisition and reduced interest income associated with cash used to fund a portion of the acquisition, (iii) the impact of certain fair value adjustments such as additional depreciation expense for adjustments to PP&E and reduction to interest expense for adjustments to debt, and (iv) costs directly related to acquiring BJ Services. The pro forma results do not include any potential synergies, cost savings or other expected benefits of the acquisition. Accordingly, the pro forma results should not be considered indicative of the results that would have occurred if the acquisition and related borrowings had been consummated as of January 1, 2010, nor are they indicative of future results. </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Nine Months Ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>September 30, 2010</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Pro Forma</b></td> <td> </td> </tr>   <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Revenue </div></td> <td> </td> <td align="left">$</td> <td align="right">11,480</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net income </div></td> <td> </td> <td align="left">$</td> <td align="right">493</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Basic net income per share </div></td> <td> </td> <td align="left">$</td> <td align="right">1.14</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Diluted net income per share </div></td> <td> </td> <td align="left">$</td> <td align="right">1.14</td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 3. SEGMENT INFORMATION</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We conduct our business primarily through operating segments that are aligned with our geographic regions, which have been aggregated into the following five reportable segments: </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="3%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>North America (U.S. Land, U.S. Gulf of Mexico and Canada)</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="3%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Latin America</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="3%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Europe/Africa/Russia Caspian</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="3%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Middle East/Asia Pacific</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="3%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Industrial Services and Other</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We have aggregated our operating segments within each reportable segment because they have similar economic characteristics and because the long-term financial performance of the segments is affected by similar economic conditions. The performance of our segments is evaluated based on profit before tax, which is defined as income before income taxes, net interest expense, corporate expenses, and certain gains and losses not allocated to the segments. The financial results of BJ Services are included in each of the five reportable segments from the date of acquisition on April 28, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Summarized financial information is shown in the following table. </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30, 2010</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Segments</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Revenue</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Profit (loss)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Revenue</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Profit (loss)</b></td> <td> </td> </tr>   <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">North America </div></td> <td> </td> <td align="left">$</td> <td align="right">2,716</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">607</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2,006</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">340</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Latin America </div></td> <td> </td> <td> </td> <td align="right">568</td> <td> </td> <td> </td> <td> </td> <td align="right">71</td> <td> </td> <td> </td> <td> </td> <td align="right">431</td> <td> </td> <td> </td> <td> </td> <td align="right">9</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Europe/Africa/Russia Caspian </div></td> <td> </td> <td> </td> <td align="right">850</td> <td> </td> <td> </td> <td> </td> <td align="right">105</td> <td> </td> <td> </td> <td> </td> <td align="right">757</td> <td> </td> <td> </td> <td> </td> <td align="right">47</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Middle East/Asia Pacific </div></td> <td> </td> <td> </td> <td align="right">708</td> <td> </td> <td> </td> <td> </td> <td align="right">84</td> <td> </td> <td> </td> <td> </td> <td align="right">606</td> <td> </td> <td> </td> <td> </td> <td align="right">39</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Industrial Services and Other </div></td> <td> </td> <td> </td> <td align="right">336</td> <td> </td> <td> </td> <td> </td> <td align="right">28</td> <td> </td> <td> </td> <td> </td> <td align="right">278</td> <td> </td> <td> </td> <td> </td> <td align="right">36</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total Operations </div></td> <td> </td> <td> </td> <td align="right">5,178</td> <td> </td> <td> </td> <td> </td> <td align="right">895</td> <td> </td> <td> </td> <td> </td> <td align="right">4,078</td> <td> </td> <td> </td> <td> </td> <td align="right">471</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Corporate and Other </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(78</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(54</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest expense, net </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(58</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(39</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Loss on early extinguishment of debt </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(40</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Acquisition-related costs </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(12</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">5,178</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">719</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">4,078</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">366</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Nine Months Ended</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Nine Months Ended</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>September 30, 2010</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Segments</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Revenue</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Profit (loss)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Revenue</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Profit (loss)</b></td> <td> </td> </tr>   <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">North America </div></td> <td> </td> <td align="left">$</td> <td align="right">7,436</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,507</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">4,411</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">685</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Latin America </div></td> <td> </td> <td> </td> <td align="right">1,583</td> <td> </td> <td> </td> <td> </td> <td align="right">205</td> <td> </td> <td> </td> <td> </td> <td align="right">1,087</td> <td> </td> <td> </td> <td> </td> <td align="right">31</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Europe/Africa/Russia Caspian </div></td> <td> </td> <td> </td> <td align="right">2,427</td> <td> </td> <td> </td> <td> </td> <td align="right">243</td> <td> </td> <td> </td> <td> </td> <td align="right">2,213</td> <td> </td> <td> </td> <td> </td> <td align="right">196</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Middle East/Asia Pacific </div></td> <td> </td> <td> </td> <td align="right">2,068</td> <td> </td> <td> </td> <td> </td> <td align="right">251</td> <td> </td> <td> </td> <td> </td> <td align="right">1,590</td> <td> </td> <td> </td> <td> </td> <td align="right">109</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Industrial Services and Other </div></td> <td> </td> <td> </td> <td align="right">930</td> <td> </td> <td> </td> <td> </td> <td align="right">76</td> <td> </td> <td> </td> <td> </td> <td align="right">690</td> <td> </td> <td> </td> <td> </td> <td align="right">71</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total Operations </div></td> <td> </td> <td> </td> <td align="right">14,444</td> <td> </td> <td> </td> <td> </td> <td align="right">2,282</td> <td> </td> <td> </td> <td> </td> <td align="right">9,991</td> <td> </td> <td> </td> <td> </td> <td align="right">1,092</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Corporate and Other </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(208</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(159</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest expense, net </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(164</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(93</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Loss on early extinguishment of debt </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(40</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Acquisition-related costs </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(78</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">14,444</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,870</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">9,991</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">762</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 4. EARNINGS PER SHARE</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     A reconciliation of the number of shares used for the basic and diluted earnings per share (“EPS”) computations is as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>Three Months Ended</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>Nine Months Ended</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted average common shares outstanding for basic EPS </div></td> <td> </td> <td> </td> <td align="right">437</td> <td> </td> <td> </td> <td> </td> <td align="right">432</td> <td> </td> <td> </td> <td> </td> <td align="right">436</td> <td> </td> <td> </td> <td> </td> <td align="right">381</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Effect of dilutive securities — stock plans </div></td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Adjusted weighted average common shares outstanding for diluted EPS </div></td> <td> </td> <td> </td> <td align="right">439</td> <td> </td> <td> </td> <td> </td> <td align="right">433</td> <td> </td> <td> </td> <td> </td> <td align="right">438</td> <td> </td> <td> </td> <td> </td> <td align="right">382</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Future potentially dilutive shares excluded from diluted EPS: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Options with an exercise price greater than the average market price for the period </div></td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 5. INCOME TAXES</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In the third quarter of 2011, total income tax expense of $13 million included a $214 million tax benefit associated with the reorganization of certain foreign subsidiaries to better align the Baker Hughes and BJ Services entities. As a result of the reorganization, previously accrued U.S. deferred income taxes related to those subsidiaries have been reduced by Baker Hughes foreign tax credits now available to offset future U.S. taxes. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 6. INVENTORIES</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Inventories, net of reserves, are comprised of the following: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>September 30,</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>December 31,</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Finished goods </div></td> <td> </td> <td align="right">$</td> <td align="right">2,683</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2,283</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Work in process </div></td> <td> </td> <td> </td> <td align="right">222</td> <td> </td> <td> </td> <td> </td> <td align="right">181</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Raw materials </div></td> <td> </td> <td> </td> <td align="right">148</td> <td> </td> <td> </td> <td> </td> <td align="right">130</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">3,053</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2,594</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 7. GOODWILL AND INTANGIBLE ASSETS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The changes in the carrying amount of goodwill are detailed below by reportable segment. </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Europe/</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Middle</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Industrial</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Africa/</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>East/</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Services</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>North</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Latin</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Russia</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Asia</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>and</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>America</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>America</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Caspian</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Pacific</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance as of December 31, 2010 </div></td> <td> </td> <td align="right">$</td> <td align="right">2,731</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">879</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">936</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">895</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">428</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">5,869</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Purchase price adjustments for previous acquisitions </div></td> <td> </td> <td> </td> <td align="right">314</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(293</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">86</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(42</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">12</td> <td> </td> <td> </td> <td> </td> <td align="right">77</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Acquisitions </div></td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other adjustments </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(3</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance as of September 30, 2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">3,046</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">586</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,022</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">853</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">440</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">5,947</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Intangible assets are comprised of the following: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>September 30, 2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>December 31, 2010</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Gross</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Less:</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Gross</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Less:</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Carrying</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Carrying</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Amount</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Amortization</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Net</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Amount</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Amortization</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Net</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Definite lived intangibles: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Technology </div></td> <td> </td> <td align="right">$</td> <td align="right">761</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">218</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">543</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">760</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">181</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">579</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Contract-based </div></td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> <td> </td> <td> </td> <td align="right">9</td> <td> </td> <td> </td> <td> </td> <td align="right">9</td> <td> </td> <td> </td> <td> </td> <td align="right">20</td> <td> </td> <td> </td> <td> </td> <td align="right">11</td> <td> </td> <td> </td> <td> </td> <td align="right">9</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Trade names </div></td> <td> </td> <td> </td> <td align="right">80</td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> <td> </td> <td> </td> <td align="right">62</td> <td> </td> <td> </td> <td> </td> <td align="right">84</td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> <td> </td> <td> </td> <td align="right">66</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Customer relationships </div></td> <td> </td> <td> </td> <td align="right">496</td> <td> </td> <td> </td> <td> </td> <td align="right">66</td> <td> </td> <td> </td> <td> </td> <td align="right">430</td> <td> </td> <td> </td> <td> </td> <td align="right">495</td> <td> </td> <td> </td> <td> </td> <td align="right">39</td> <td> </td> <td> </td> <td> </td> <td align="right">456</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Subtotal </div></td> <td> </td> <td> </td> <td align="right">1,355</td> <td> </td> <td> </td> <td> </td> <td align="right">311</td> <td> </td> <td> </td> <td> </td> <td align="right">1,044</td> <td> </td> <td> </td> <td> </td> <td align="right">1,359</td> <td> </td> <td> </td> <td> </td> <td align="right">249</td> <td> </td> <td> </td> <td> </td> <td align="right">1,110</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Indefinite-lived intangibles: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Trade name </div></td> <td> </td> <td> </td> <td align="right">360</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">360</td> <td> </td> <td> </td> <td> </td> <td align="right">360</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">360</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">In-process research and development </div></td> <td> </td> <td> </td> <td align="right">90</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">90</td> <td> </td> <td> </td> <td> </td> <td align="right">99</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">99</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">1,805</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">311</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,494</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,818</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">249</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1,569</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Intangible assets are amortized either on a straight-line basis with estimated useful lives ranging from 2 to 20 years, or on a basis that reflects the pattern in which the economic benefits of the intangible assets are expected to be realized, which ranges from 15 to 30 years. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Amortization expense for intangible assets included in net income for the three months and nine months ended September 30, 2011 was $25 million and $71 million, respectively, and is estimated to be $24 million for the remainder of fiscal year 2011. Estimated amortization expense for each of the subsequent five fiscal years is expected to be as follows: 2012 — $94 million; 2013 — $93 million; 2014 — $92 million; 2015 — $90 million; and 2016 — $89 million. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 8. FINANCIAL INSTRUMENTS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>Fair Value of Financial Instruments</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Our financial instruments include cash and cash equivalents, short-term investments, accounts receivable, accounts payable, debt, foreign currency forward contracts and interest rate swaps. Except as described below, the estimated fair value of such financial instruments at September 30, 2011 and December 31, 2010 approximates their carrying value as reflected in our consolidated condensed balance sheets. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Short-term Investments</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     During the year ended December 31, 2010, we purchased short-term investments consisting of $250 million in U.S. Treasury Bills, which matured in May 2011 and were used to repay the $250 million principal amount of our 5.75% notes that matured in June 2011 (“5.75% Notes”). </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Debt</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The estimated fair value of total debt at September 30, 2011 and December 31, 2010 was $4,635 million and $4,298 million, respectively, which differs from the carrying amount of $3,900 million and $3,885 million, respectively, included in our consolidated condensed balance sheets. The fair value was determined using Level 2 inputs including quoted period end market prices. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Foreign Currency Forward Contracts</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We conduct our business in over 80 countries around the world, and we are exposed to market risks resulting from fluctuations in foreign currency exchange rates. A number of our significant foreign subsidiaries have designated the local currency as their functional currency. We transact in various foreign currencies and have established a program that primarily utilizes foreign currency forward contracts to reduce the risks associated with the effects of certain foreign currency exposures. Under this program, our strategy is to have gains or losses on the foreign currency forward contracts mitigate the foreign currency transaction gains or losses to the extent practical. These foreign currency exposures typically arise from changes in the value of assets and liabilities which are denominated in currencies other than the functional currency. Our foreign currency forward contracts generally settle in less than 180 days. We do not use these forward contracts for trading or speculative purposes. We designate these forward contracts as fair value hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period to our consolidated condensed balance sheet with changes in fair value recorded in our consolidated condensed statement of operations along with the change in fair value of the hedged item. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We had outstanding foreign currency forward contracts with notional amounts aggregating $157 million and $156 million to hedge exposure to currency fluctuations in various foreign currencies at September 30, 2011 and December 31, 2010, respectively. These contracts are designated and qualify as fair value hedging instruments. The fair value was determined using Level 2 inputs including quoted market prices for contracts with similar terms and maturity dates. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Interest Rate Swaps</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We are subject to interest rate risk on our debt and investment of cash and cash equivalents arising in the normal course of our business, as we do not engage in speculative trading strategies. We maintain an interest rate management strategy, which primarily uses a mix of fixed and variable rate debt that is intended to mitigate the exposure to changes in interest rates in the aggregate for our investment portfolio. We may use interest rate swaps to manage the economic effect of fixed rate obligations associated with certain debt. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In September 2011, we redeemed in full our $500 million 6.5% fixed rate senior notes maturing November 2013 (“6.5% Notes”). Consequently, we terminated two related interest rate swap agreements resulting in a gain on the swap agreements of $25 million. The two swap agreements were entered into in June 2009 for a notional amount of $250 million each in order to hedge changes in the fair market value of the debt. The swap agreements had been designated and each qualified as a fair value hedging instrument. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Fair Value of Derivative Instruments</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The fair values of derivative instruments included in our consolidated condensed balance sheets were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="46%"> </td> <td width="5%"> </td> <td width="33%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Derivative</b></td> <td> </td> <td nowrap="nowrap" align="left"><b>Balance Sheet Location</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>September 30, 2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>December 31, 2010</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="11" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign Currency Forward Contracts </div></td> <td> </td> <td align="left" valign="top">Other current assets</td> <td> </td> <td align="right">$</td> <td align="right">3</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign Currency Forward Contracts </div></td> <td> </td> <td align="left" valign="top">Other accrued liabilities</td> <td> </td> <td align="right">$</td> <td align="right">8</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest Rate Swaps </div></td> <td> </td> <td align="left" valign="top">Other assets</td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">24</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The effects of derivative instruments in our consolidated condensed statements of operations were as follows (amounts exclude any income tax effects): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="26%"> </td> <td width="3%"> </td> <td width="47%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000"><b>Gain (Loss) Recognized in Income</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>Three Months Ended</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>Nine Months Ended</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Derivative</b></td> <td> </td> <td nowrap="nowrap" align="left"><b>Statement of Operations Location</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="19" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign Currency Forward Contracts </div></td> <td> </td> <td align="left" valign="top">Marketing, general and administrative</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">11</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(6</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest Rate Swaps </div></td> <td> </td> <td align="left" valign="top">Interest expense</td> <td> </td> <td align="right">$</td> <td align="right">2</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">8</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">12</td> <td> </td> </tr>  </table> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 9. INDEBTEDNESS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In August 2011, we completed a private placement of $750 million 3.2% senior notes that have registration rights and will mature in August 2021 (“3.2% Notes”) under our Indenture dated October 28, 2008. Net proceeds from the offering were approximately $742 million after deducting the underwriting discounts and expenses of the offering. Interest is payable February 15 and August 15 of each year. The 3.2% Notes are senior unsecured obligations and rank equal in right of payment to all of our existing and future indebtedness; senior in right of payment to any future subordinated indebtedness; and effectively junior to our future secured indebtedness, if any, and structurally subordinated to all existing and future indebtedness of our subsidiaries. We may redeem, at our option, all or part of the 3.2% Notes at any time, at the applicable make-whole redemption prices plus accrued and unpaid interest to the date of redemption. In September 2011, we used $563 million of the net proceeds from the offering to redeem in full our 6.5% Notes, and the remainder will be used for general corporate purposes, which could include funding on-going operations, business acquisitions and repurchases of our common stock. The redemption of our 6.5% Notes resulted in a payment of a redemption premium of $63 million and in a pretax loss on the early extinguishment of this debt of $40 million, which includes the redemption premium, the write off of the remaining original debt issuance costs and debt discount, partially offset by the $25 million gain from the termination of two related interest rate swap agreements. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In June 2011, we repaid the $250 million principal amount of our 5.75% Notes using proceeds from U.S. Treasury Bills that matured in May 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In September 2011, we entered into a five-year committed $2.5 billion revolving credit facility maturing in September 2016. The new revolving credit facility replaced our existing committed revolving credit facilities of $500 million maturing in July 2012 and $1.2 billion maturing in March 2013, both of which were terminated in September 2011. There were no direct borrowings under committed revolving credit facilities during the nine months ended September 30, 2011. We also have a commercial paper program under which we may issue up to $1.0 billion in commercial paper with maturity of no more than 270 days. To the extent we have outstanding commercial paper, our ability to borrow under the facility is reduced. At September 30, 2011, we had no outstanding commercial paper. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 10. EMPLOYEE BENEFIT PLANS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We have both funded and unfunded noncontributory defined benefit pension plans (“Pension Benefits”) covering certain employees primarily in the U.S., Canada, the U.K., Germany and several countries in the Middle East and Asia Pacific region. We also provide certain postretirement health care benefits (“other postretirement benefits”), through an unfunded plan, to substantially all U.S. employees who retire and have met certain age and service requirements. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The components of net periodic cost are as follows for the three months ended September 30: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>U.S. Pension Benefits</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Non-U.S. Pension Benefits</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Other Postretirement Benefits</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Service cost </div></td> <td> </td> <td align="right">$</td> <td align="right">10</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">8</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">3</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest cost </div></td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> <td> </td> <td> </td> <td align="right">8</td> <td> </td> <td> </td> <td> </td> <td align="right">8</td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Expected return on plan assets </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(8</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(7</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(8</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(7</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Amortization of net loss </div></td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net periodic cost (benefit) </div></td> <td> </td> <td align="right">$</td> <td align="right">10</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">9</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">3</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">4</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">4</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">5</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The components of net periodic cost are as follows for the nine months ended September 30: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>Other Postretirement</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>U.S. Pension Benefits</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Non-U.S. Pension Benefits</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Benefits</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Service cost </div></td> <td> </td> <td align="right">$</td> <td align="right">28</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">24</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">5</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">7</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest cost </div></td> <td> </td> <td> </td> <td align="right">15</td> <td> </td> <td> </td> <td> </td> <td align="right">16</td> <td> </td> <td> </td> <td> </td> <td align="right">24</td> <td> </td> <td> </td> <td> </td> <td align="right">20</td> <td> </td> <td> </td> <td> </td> <td align="right">6</td> <td> </td> <td> </td> <td> </td> <td align="right">8</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Expected return on plan assets </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(24</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(21</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(24</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(17</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Amortization of prior service cost (benefit) </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(2</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Amortization of net loss </div></td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> <td> </td> <td> </td> <td align="right">9</td> <td> </td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net periodic cost (benefit) </div></td> <td> </td> <td align="right">$</td> <td align="right">26</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">28</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">9</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">11</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">10</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">16</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We invest the plan assets of our U.S. and Non-U.S. pension plans in investments according to the policies developed by our investment committees. The changes in the fair value of our U.S. and Non-U.S. pension plans’ assets using Level 3 unobservable inputs for the three months and nine months ended September 30, 2011 were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="23" style="border-bottom: 1px solid #000000"><b>Three Months Ended September 30, 2011</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>U.S.</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Global</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Non-U.S.</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Non-U.S.</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Property</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Property</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Hedge</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Property</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Insurance</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fund</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fund</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Funds</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fund</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Contracts</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Ending balance at June 30, 2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">15</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">102</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">20</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">16</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">153</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Purchases (sales) </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(7</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Unrealized gains (loss) </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(4</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(5</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Transfers from Level 2 to Level 3 </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Ending balance at September 30, 2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">8</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">3</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">102</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">19</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">16</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">148</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="23" style="border-bottom: 1px solid #000000"><b>Nine Months Ended September 30, 2011</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>U.S.</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Global</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Non-U.S.</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Non-U.S.</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Property</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Property</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Hedge</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Property</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Insurance</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fund</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fund</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Funds</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fund</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Contracts</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Ending balance at December 31, 2010 </div></td> <td> </td> <td align="right">$</td> <td align="right">14</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">19</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">16</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">49</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Purchases (sales) </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(7</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Unrealized gains (loss) </div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Transfers from Level 2 to Level 3 </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">98</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">98</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Ending balance at September 30, 2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">8</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">3</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">102</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">19</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">16</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">148</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Beginning in 2011, the U.S. pension plan began purchasing shares in three hedge funds, which the Company deems to be Level 3 investments. These hedge funds take long and short positions in equities, fixed income securities, currencies and derivative contracts. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 11. COMMITMENTS AND CONTINGENCIES</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>LITIGATION</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We are involved in litigation or proceedings that have arisen in our ordinary business activities. We insure against these risks to the extent deemed prudent by our management and to the extent insurance is available, but no assurance can be given that the nature and amount of that insurance will be sufficient to fully indemnify us against liabilities arising out of pending and future legal proceedings. Many of these insurance policies contain deductibles or self-insured retentions in amounts we deem prudent and for which we are responsible for payment. In determining the amount of self-insurance, it is our policy to self-insure those losses that are predictable, measurable and recurring in nature, such as claims for automobile liability, general liability and workers compensation. The accruals for losses are calculated by estimating losses for claims using historical claim data, specific loss development factors and other information as necessary. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We were among several unrelated companies who received a subpoena from the Office of the New York Attorney General, dated June 17, 2011. The subpoena received by the Company seeks information and documents relating to, among other things, natural gas development and hydraulic fracturing. We are reviewing the subpoena and discussing its contents with the New York Attorney General’s office in anticipation of our responding as appropriate. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In July 2011, the Company settled the previously reported customer claim against BJ Services relating to the move of a stimulation vessel out of the North Sea market. The settlement did not have a material effect on our consolidated condensed financial statements. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>OTHER</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In the normal course of business with customers, vendors and others, we have entered into off-balance sheet arrangements, such as surety bonds for performance, letters of credit and other bank issued guarantees, which totaled approximately $1.2 billion at September 30, 2011. None of the off-balance sheet arrangements either has, or is likely to have, a material effect on our consolidated condensed financial statements. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 12. STOCKHOLDERS’ EQUITY</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following tables summarize our stockholders’ equity activity. </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Capital</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>in Excess</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Common</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>of</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Retained</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Comprehensive</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Noncontrolling</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Stock</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Par Value</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Earnings</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Loss</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Interest</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at December 31, 2010 </div></td> <td> </td> <td align="right">$</td> <td align="right">432</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">7,005</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">7,083</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(420</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">186</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">14,286</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive income: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Net income attributable to Baker Hughes </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">1,425</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Foreign currency translation adjustments </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(32</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Defined benefit pension plan, net of tax of ($4) </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total comprehensive income </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">1,397</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Issuance of common stock pursuant to employee stock plans </div></td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> <td> </td> <td> </td> <td align="right">126</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">130</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Tax benefit on stock plans </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">17</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">17</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Stock-based compensation costs </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">85</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">85</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cash dividends ($0.45 per share) </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(195</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(195</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Purchase of subsidiary shares of noncontrolling interests </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">11</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(37</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(26</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Dividends paid to noncontrolling interests </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(5</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(5</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Capital contribution from noncontrolling interest, and other </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">8</td> <td> </td> <td> </td> <td> </td> <td align="right">8</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Change in noncontrolling interest associated with purchase price adjustment </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">66</td> <td> </td> <td> </td> <td> </td> <td align="right">66</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at September 30, 2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">436</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">7,244</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">8,313</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(447</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">217</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">15,763</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Capital</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>in Excess</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Common</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>of</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Retained</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Comprehensive</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Noncontrolling</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Stock</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Par Value</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Earnings</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Loss</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Interest</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at December 31, 2009 </div></td> <td> </td> <td align="right">$</td> <td align="right">312</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">874</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6,512</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(414</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">7,284</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive income: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Net income </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">477</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Foreign currency translation adjustments </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(41</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Defined benefit pension plans, net of tax of $(5) </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total comprehensive income </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">454</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Issuance of common stock pursuant to employee stock plans </div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">21</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">22</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Issuance of common stock to acquire BJ Services </div></td> <td> </td> <td> </td> <td align="right">118</td> <td> </td> <td> </td> <td> </td> <td align="right">5,986</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">6,104</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Tax benefit on stock plans </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Stock-based compensation costs </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">66</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">66</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash dividends ($0.45 per share) </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(175</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(175</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at September 30, 2010 </div></td> <td> </td> <td align="right">$</td> <td align="right">431</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6,949</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6,814</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(437</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">13,757</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Total accumulated other comprehensive loss, net of tax, consisted of the following: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>September 30, 2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>December 31, 2010</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign currency translation adjustments </div></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(293</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(261</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Pension and other postretirement benefits </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(154</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(159</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Total accumulated other comprehensive loss </div></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(447</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(420</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>Nature of Operations</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Baker Hughes Incorporated (“Baker Hughes,” “Company,” “we,” “our” or “us”) is engaged in the oilfield services industry. We are a leading supplier of wellbore-related products and technology services and provide products and services for drilling, pressure pumping, formation evaluation, completion and production, and reservoir development services to the worldwide oil and natural gas industry. We also provide products and services to the downstream refining and process and pipeline industries. </div> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Basis of Presentation</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Our unaudited consolidated condensed financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. These unaudited consolidated condensed financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K/A for the year ended December 31, 2010 (“2010 Annual Report”). We believe the unaudited consolidated condensed financial statements included herein reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. In the notes to the unaudited consolidated condensed financial statements, all dollar and share amounts in tabulations are in millions of dollars and shares, respectively, unless otherwise indicated. </div> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Accounting Standards Updates</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In May 2011, the Financial Accounting Standards Board (“FASB”) issued an update to Accounting Standards Codification (“ASC”) 820, <i>Fair Value Measurement</i>. The Accounting Standards Update (“ASU”) conforms certain sections of ASC 820 to International Financial Reporting Standards in order to provide a single converged guidance on the measurement of fair value. This update also expands the existing disclosure requirements for fair value measurements. This ASU is effective for interim and annual periods beginning after December 15, 2011. We will adopt this ASU prospectively in the first quarter of 2012. We currently do not expect this ASU to have a material impact, if any, on our consolidated condensed financial statements. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In June 2011, the FASB issued an update to ASC 220, <i>Comprehensive Income</i>. This ASU requires entities to present components of comprehensive income in either a continuous statement of comprehensive income or two separate but consecutive statements that would include reclassification adjustments for items that are reclassified from other comprehensive income to net income on the face of the financial statements. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We will adopt the new presentation requirements of this ASU retrospectively in the first quarter of 2012. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In September 2011, the FASB issued an update to ASC 350, <i>Intangibles — Goodwill and Other.</i> This ASU amends the guidance in ASC 350-20 on testing for goodwill impairment. The revised guidance allows entities testing for goodwill impairment to have the option of performing a qualitative assessment before calculating the fair value of the reporting unit. The ASU does not change how goodwill is calculated or assigned to reporting units, nor does it revise the requirement to test annually for impairment. The ASU is limited to goodwill and does not amend the annual requirement for testing other indefinite-lived intangible assets for impairment. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We will adopt this ASU for our 2012 goodwill impairment testing. We do not expect this ASU to have a material impact, if any, on our consolidated condensed financial statements. </div> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Fair Values</b></td> <td> </td> </tr>   <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Assets: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Cash and cash equivalents </div></td> <td> </td> <td align="left">$</td> <td align="right">113</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Accounts receivable </div></td> <td> </td> <td> </td> <td align="right">951</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Inventories </div></td> <td> </td> <td> </td> <td align="right">419</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other current assets </div></td> <td> </td> <td> </td> <td align="right">125</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Property, plant and equipment </div></td> <td> </td> <td> </td> <td align="right">2,745</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Intangible assets </div></td> <td> </td> <td> </td> <td align="right">1,404</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Goodwill </div></td> <td> </td> <td> </td> <td align="right">4,406</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other long-term assets </div></td> <td> </td> <td> </td> <td align="right">109</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Liabilities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Liabilities for change in control and transaction fees </div></td> <td> </td> <td> </td> <td align="right">210</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Current liabilities </div></td> <td> </td> <td> </td> <td align="right">776</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Deferred income taxes and other tax liabilities </div></td> <td> </td> <td> </td> <td align="right">1,428</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Long-term debt </div></td> <td> </td> <td> </td> <td align="right">531</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Pension and other postretirement liabilities </div></td> <td> </td> <td> </td> <td align="right">154</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other long-term liabilities </div></td> <td> </td> <td> </td> <td align="right">29</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Noncontrolling interests </div></td> <td> </td> <td> </td> <td align="right">247</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Net assets acquired </div></td> <td> </td> <td align="left">$</td> <td align="right">6,897</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="46%"> </td> <td width="5%"> </td> <td width="33%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Derivative</b></td> <td> </td> <td nowrap="nowrap" align="left"><b>Balance Sheet Location</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>September 30, 2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>December 31, 2010</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="11" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign Currency Forward Contracts </div></td> <td> </td> <td align="left" valign="top">Other current assets</td> <td> </td> <td align="right">$</td> <td align="right">3</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign Currency Forward Contracts </div></td> <td> </td> <td align="left" valign="top">Other accrued liabilities</td> <td> </td> <td align="right">$</td> <td align="right">8</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest Rate Swaps </div></td> <td> </td> <td align="left" valign="top">Other assets</td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">24</td> <td> </td> </tr>  </table> </div> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="26%"> </td> <td width="3%"> </td> <td width="47%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="15" style="border-bottom: 1px solid #000000"><b>Gain (Loss) Recognized in Income</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>Three Months Ended</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>Nine Months Ended</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Derivative</b></td> <td> </td> <td nowrap="nowrap" align="left"><b>Statement of Operations Location</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="19" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign Currency Forward Contracts </div></td> <td> </td> <td align="left" valign="top">Marketing, general and administrative</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(3</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">11</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(6</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest Rate Swaps </div></td> <td> </td> <td align="left" valign="top">Interest expense</td> <td> </td> <td align="right">$</td> <td align="right">2</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">8</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">12</td> <td> </td> </tr>  </table> </div> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="23" style="border-bottom: 1px solid #000000"><b>Three Months Ended September 30, 2011</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>U.S.</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Global</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Non-U.S.</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Non-U.S.</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Property</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Property</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Hedge</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Property</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Insurance</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fund</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fund</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Funds</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fund</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Contracts</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Ending balance at June 30, 2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">15</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">102</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">20</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">16</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">153</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Purchases (sales) </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(7</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Unrealized gains (loss) </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(4</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(5</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Transfers from Level 2 to Level 3 </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Ending balance at September 30, 2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">8</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">3</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">102</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">19</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">16</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">148</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="23" style="border-bottom: 1px solid #000000"><b>Nine Months Ended September 30, 2011</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>U.S.</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Global</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Non-U.S.</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Non-U.S.</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Property</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Property</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Hedge</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Property</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Insurance</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fund</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fund</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Funds</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fund</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Contracts</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Ending balance at December 31, 2010 </div></td> <td> </td> <td align="right">$</td> <td align="right">14</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">19</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">16</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">49</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Purchases (sales) </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(7</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Unrealized gains (loss) </div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Transfers from Level 2 to Level 3 </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">98</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">98</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Ending balance at September 30, 2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">8</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">3</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">102</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">19</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">16</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">148</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Capital</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>in Excess</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Common</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>of</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Retained</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Comprehensive</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Noncontrolling</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Stock</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Par Value</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Earnings</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Loss</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Interest</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at December 31, 2010 </div></td> <td> </td> <td align="right">$</td> <td align="right">432</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">7,005</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">7,083</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(420</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">186</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">14,286</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive income: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Net income attributable to Baker Hughes </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">1,425</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Foreign currency translation adjustments </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(32</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Defined benefit pension plan, net of tax of ($4) </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total comprehensive income </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">1,397</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Issuance of common stock pursuant to employee stock plans </div></td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> <td> </td> <td> </td> <td align="right">126</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">130</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Tax benefit on stock plans </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">17</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">17</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Stock-based compensation costs </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">85</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">85</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Cash dividends ($0.45 per share) </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(195</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(195</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Purchase of subsidiary shares of noncontrolling interests </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">11</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(37</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(26</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Dividends paid to noncontrolling interests </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(5</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(5</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Capital contribution from noncontrolling interest, and other </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">8</td> <td> </td> <td> </td> <td> </td> <td align="right">8</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Change in noncontrolling interest associated with purchase price adjustment </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">66</td> <td> </td> <td> </td> <td> </td> <td align="right">66</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at September 30, 2011 </div></td> <td> </td> <td align="right">$</td> <td align="right">436</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">7,244</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">8,313</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(447</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">217</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">15,763</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Capital</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Accumulated</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>in Excess</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Common</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>of</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Retained</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Comprehensive</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Noncontrolling</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Stock</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Par Value</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Earnings</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Loss</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Interest</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Total</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at December 31, 2009 </div></td> <td> </td> <td align="right">$</td> <td align="right">312</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">874</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6,512</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(414</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">7,284</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive income: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Net income </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">477</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Foreign currency translation adjustments </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(41</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Defined benefit pension plans, net of tax of $(5) </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total comprehensive income </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">454</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Issuance of common stock pursuant to employee stock plans </div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">21</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">22</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Issuance of common stock to acquire BJ Services </div></td> <td> </td> <td> </td> <td align="right">118</td> <td> </td> <td> </td> <td> </td> <td align="right">5,986</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">6,104</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Tax benefit on stock plans </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Stock-based compensation costs </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">66</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="right">66</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash dividends ($0.45 per share) </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(175</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(175</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Balance at September 30, 2010 </div></td> <td> </td> <td align="right">$</td> <td align="right">431</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6,949</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6,814</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(437</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">13,757</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> </div> </div>

1262000000 202000000 1000000000 -159000000 -54000000 -208000000 -78000000 P5Y 21000000 1360000000 1125000000 214000000 68000000 1818000000 1805000000 210000000 1200000000 500000000 May, 2011 P30Y P270D P180D P15Y 250000000 2 2 5 63000000 false --12-31 Q3 2011 2011-09-30 10-Q 0000808362 436465887 Yes Large Accelerated Filer BAKER HUGHES INC Yes

1496000000

1688000000

3942000000

4977000000

219000000

53000000

4367000000

5035000000

159000000

154000000

-261000000

-293000000

-420000000

-447000000

7005000000

7244000000

-26000000

11000000

-37000000

66000000

85000000

2000000

17000000

162000000

223000000

7000000

3000000

22986000000

24351000000

8707000000

9341000000

793000000

56000000

6897000000

6048000000

118000000

1.14

6897000000

113000000

419000000

125000000

951000000

776000000

-1428000000

4406000000

109000000

29000000

154000000

2745000000

493000000

11480000000

247000000

78000000

12000000

1404000000

33000000

78000000

1595000000

1606000000

1456000000

803000000

11000000

-653000000

0.45

0.15

0.45

0.15

432000000

436000000

454000000

1397000000

3132000000

1176000000

3785000000

1353000000

4631000000

2013000000

7361000000

2578000000

9136000000

3673000000

12370000000

4361000000

531000000

3885000000

750000000

3900000000

4298000000

4635000000

0.0575

0.065

0.032

-155000000

-312000000

234000000

254000000

1000000

-5000000

-1000000

-4000000

-3000000

-9000000

-1000000

-3000000

-7000000

-1000000

-3000000

1000000

-2000000

17000000

21000000

7000000

24000000

8000000

49000000

16000000

19000000

14000000

153000000

16000000

20000000

15000000

102000000

148000000

3000000

16000000

19000000

8000000

102000000

20000000

8000000

16000000

8000000

2000000

5000000

24000000

6000000

15000000

8000000

2000000

5000000

11000000

16000000

28000000

4000000

5000000

9000000

10000000

26000000

3000000

4000000

10000000

3000000

-7000000

4000000

3000000

-7000000

4000000

5000000

7000000

24000000

2000000

3000000

8000000

6000000

28000000

2000000

10000000

98000000

743000000

978000000

2000000

24000000

8000000

3000000

1000000

12000000

11000000

2000000

-6000000

8000000

-3000000

2000000

175000000

195000000

1.25

0.59

3.27

1.62

1.25

0.59

3.25

1.61

5000000

6000000

589000000

686000000

1200000000

249000000

11000000

181000000

39000000

18000000

311000000

9000000

218000000

66000000

18000000

71000000

25000000

1359000000

20000000

760000000

495000000

84000000

1355000000

18000000

761000000

496000000

80000000

1110000000

9000000

579000000

456000000

66000000

1044000000

9000000

543000000

430000000

62000000

24000000

89000000

90000000

94000000

92000000

93000000

25000000

-40000000

40000000

5869000000

428000000

879000000

2731000000

936000000

895000000

5947000000

440000000

586000000

3046000000

1022000000

853000000

4000000

-3000000

77000000

12000000

-293000000

314000000

86000000

-42000000

762000000

71000000

31000000

685000000

1092000000

196000000

109000000

366000000

36000000

9000000

340000000

471000000

47000000

39000000

1870000000

76000000

205000000

1507000000

2282000000

243000000

251000000

719000000

28000000

71000000

607000000

895000000

105000000

84000000

516000000

934000000

285000000

111000000

445000000

13000000

177000000

183000000

504000000

1107000000

-68000000

-189000000

97000000

84000000

161000000

463000000

34000000

-6000000

1000000

2000000

99000000

360000000

90000000

360000000

1569000000

1494000000

93000000

39000000

164000000

58000000

96000000

184000000

2283000000

2683000000

2594000000

3053000000

130000000

148000000

181000000

222000000

22986000000

24351000000

3139000000

2998000000

2500000000

3554000000

3846000000

-79000000

-124000000

186000000

217000000

5000000

8000000

1344000000

-164000000

-1916000000

-1177000000

578000000

682000000

477000000

255000000

1425000000

706000000

66000000

156000000

157000000

855000000

405000000

2074000000

817000000

504000000

517000000

231000000

254000000

531000000

603000000

18000000

5000000

-5000000

-4000000

-41000000

-32000000

-1000000

164000000

150000000

-39000000

-14000000

175000000

195000000

26000000

852000000

5000000

1005000000

1651000000

250000000

483000000

469000000

26000000

29000000

144000000

742000000

1479000000

742000000

250000000

2000000

-1000000

9000000

-41000000

152000000

215000000

477000000

255000000

1425000000

706000000

6310000000

6966000000

19000000

76000000

250000000

813000000

563000000

500000000

324000000

118000000

337000000

117000000

7083000000

8313000000

4001000000

1391000000

4660000000

1670000000

9991000000

690000000

1087000000

4411000000

9991000000

2213000000

1590000000

4078000000

278000000

431000000

2006000000

4078000000

757000000

606000000

14444000000

930000000

1583000000

7436000000

14444000000

2427000000

2068000000

5178000000

336000000

568000000

2716000000

5178000000

850000000

708000000

5990000000

2687000000

9784000000

3508000000

971000000

354000000

887000000

313000000

66000000

85000000

331000000

54000000

250000000

14100000000

15546000000

7284000000

-414000000

874000000

312000000

6512000000

13757000000

-437000000

6949000000

431000000

6814000000

14286000000

-420000000

7005000000

432000000

186000000

7083000000

15763000000

-447000000

7244000000

436000000

217000000

8313000000

6104000000

5986000000

118000000

22000000

21000000

1000000

130000000

126000000

4000000

382000000

433000000

438000000

439000000

381000000

432000000

436000000

437000000